Malta, along with Latvia and Spain, was today given two months to fully transpose the European Union’s 4th Anti-Money Laundering Directive into national law, short of which it will be hauled before the European Court of Justice over the matter.
The European Commission yesterday sent a second reasoned opinion to Malta over the breach, although the government had claimed it had fully implemented the law, at the 11th hour, back in December.
The Commission, however, has found Malta’s transposition to have been incomplete.
The Commission said today, “The anti-money laundering rules are crucial in the fight against money laundering and terrorism financing.
“The Panama Papers and other scandals have revealed the need for stricter anti-money laundering rules. Gaps in one Member State have an impact on all others. This is why the effective fight against money laundering is one of the central points of the EU's approach to combating crime in Europe.”
All EU Member States were to have implemented the rules of the 4th Anti-Money Laundering Directive by 26 June 2017. There are currently infringement procedures ongoing against 20 Member States: three at the stage of court referrals, nine at the stage of reasoned opinions, and eight at the stage of letters of formal notice.
“In the meantime, a majority of Member States have adopted the relevant laws,” the Commission said, adding that it is “now carefully checking whether these laws completely implement the provisions of the 4th Anti-Money Laundering Directive.”
In the meantime, the EU’s 5th Anti-Money Laundering Directive has been agreed, and entered into force on 9 July 2018. Member States will have to implement these new rules into their national legislation by 10 January 2020.
“If Malta, Latvia and Spain fail to bring their national legislation in line with EU law within the next two months, the Commission may decide to refer the cases to the Court of Justice of the EU,” the Commission warned.
Věra Jourová, Commissioner for Justice, Consumers and Gender Equality said: "Money laundering and terrorist financing affect the EU as a whole. We cannot afford to let any EU country be the weakest link. Money laundered in one country can and often will support crime in another country. This is why we require that all Member States take the necessary steps to fight money laundering, and thereby also dry up criminal and terrorist funds. We will continue to follow implementation of these EU rules by Member States very closely and as a matter of priority.”
Government statement
In reply, the Government of Malta, and the Ministry for Finance in particular, said it took note of the Reasoned Opinion that was issued earlier today by the European Commission, based on what the government said were alleged gaps with regard to Malta’s transposition of the 4th Anti-Money Laundering Directive into Maltese legislation.
The Maltese authorities acknowledged the Commission’s assessment of Malta’s transposition of the Anti-Money Laundering Directive Four framework and its compliance with Council Directive (EU) 2015/849. As already stated in earlier correspondence exchanges with the Commission, the Prevention of Money Laundering Act was meant to transpose all the provisions of this Directive. This was done at the end of 2017, with the ancillary Legal Notices published in January 2018. In this respect, we welcome the suggestions to improve further the text used in the transposition of the Directive in national legislation.
In the spirit of collaboration, Maltese legal officials will engage in technical discussions with the Commission’s legal team to explain the reasons and justification of our legislation and make any corrections which might be required.
The government said it remained committed to continue strengthening the work it has already undertaken concerning the strengthening of institutions, combating money laundering, and fighting international tax avoidance.